Volume pricing with flat fee

Overview

Volume pricing with flat fee is a pricing strategy where a flat fee is charged, and additional usage is billed based on predefined volume tiers. Unlike standard volume pricing, where only the per-unit price decreases, this model introduces different flat fees at each volume level to account for increased operational or service costs.

This model is commonly used in SaaS, cloud services, and subscription-based platforms where customers pay a base fee and receive a certain volume of usage, with additional pricing based on their total consumption.

Example: API request

A cloud service provider charges customers for API requests based on usage tiers, with a different flat fee applied at each tier.

If a customer makes 75,000 API requests in a month:

• They fall into the 50,001 - 100,000 tier.

• The flat fee for this tier is $250.

• API request pricing is $0.06 per request.

Use a product based on volume pricing with flat fee

Step 1: create a product

1. Navigate to Contracts > Products in the left side panel.

2. Click + CREATE NEW drop-down menu at the top right of the Products page,.

3. Select the Product menu option.

4. Fill the relevant details on the Create Product form, and click on the SAVE & PROCEED button.
5. On the Edit Product page, click on the + ADD PRICE button.
6. On the Add Price Details form, click on the Pricing Models drop-down menu, and select Volume With Flat Fee option.

7. Create volume tiers by specifying the flat fee and the usage fee for each tier, as shown below.

8. Fill in all the other product details and click on the CONFIRM button.

Step 2: Use the product

• Add the product to a contract.
• Add the product to a plan.

Volume pricing versus volume pricing with flat fee